I still don't understand why people would "make a run" on NCB. Your money is insured up to $100,000 by FDIC, what sense does it make to take it out and keep it under your mattress where it won't make any money.

 

There is the remote chance that this financial crisis goes viral and thousands of banks nationwide go under.  If that scenario plays out then the FDIC literally does not have the money to insure all deposits up to $100,000 as they claim.  More than likely this won't happen, but there is a distinct possibility.

^Fair point.  But in that event, after already having bailed out Wall Street (which still seems very likely), there would be a insurrection if the government did not also then bail out the FDIC.

I have no idea what the procedure is if you have a bank that fails and you have to use the FDIC, but I would imagine it is a major hassle.

I still don't understand why people would "make a run" on NCB. Your money is insured up to $100,000 by FDIC, what sense does it make to take it out and keep it under your mattress where it won't make any money.

 

There is the remote chance that this financial crisis goes viral and thousands of banks nationwide go under. If that scenario plays out then the FDIC literally does not have the money to insure all deposits up to $100,000 as they claim. More than likely this won't happen, but there is a distinct possibility.

 

That scenario would never happen. If someone withdraws their money, they're going to put it into another bank with better prospects. In the 30s, cash was much more common. People didn't have ATMs and online payments.  Just as the FDIC can't give everone their money, banks don't have the physical cash to give everyone.

 

NCB doesn't have liquidity problems and they have a steady inflow of deposits with a much smaller number of risky assets than WaMu. The market is just overreacting.

on the other hand, you can take all of your assets out of a bank with a few mouse clicks now

I'm certainly not a stock analyst, but I don't see a rational reason for this drop.  If I had money to invest, it would be on National City stock right now.

I'm certainly not a stock analyst, but I don't see a rational reason for this drop. If I had money to invest, it would be on National City stock right now.

 

I completely agree. I wish that I had a few extra grand to invest. Talk about a knee-jerk market. There is no reason for NCB to be tanking. They'll rebound.

I'm certainly not a stock analyst, but I don't see a rational reason for this drop.  If I had money to invest, it would be on National City stock right now.

 

I completely agree. I wish that I had a few extra grand to invest. Talk about a knee-jerk market. There is no reason for NCB to be tanking. They'll rebound.

 

What evidence is there for us to believe that is the case for NatCity?

I'm certainly not a stock analyst, but I don't see a rational reason for this drop.  If I had money to invest, it would be on National City stock right now.

 

I completely agree. I wish that I had a few extra grand to invest. Talk about a knee-jerk market. There is no reason for NCB to be tanking. They'll rebound.

 

What evidence is there for us to believe that is the case for NatCity?

 

Haven't you been following this story? From what I'm reading in the papers and from a friend who is high up in National City, NCB currently is fine.  Seems like many investors have a "throw the baby out with the bath water" mentality right now.

I've heard both sides. My basic take is that if we get to the point where FDIC isn't working, then it won't really matter what if you took it out now or not.

A few points to make:

 

> For those looking for rational, logical behavior, the last place to look is the stock market.

 

> In the Great Depression, cash was more prevalent compared to now but banks back then still didn't keep cash on hand to cover all deposits. That's why panics/runs on the bank caused banks to fail.

 

> Runs on the bank today can also cause a bank to close, and if the government isn't willing or able to insure the losses, then you're out of luck. How many of us save money in banks, such as in checking accounts (how many of us even have much savings over and above our debt obligations)? I'll bet many of you have 401K's and they're taking it on the chin.

 

> Why wouldn't the FDIC be able to insure a bank? One possibility is when the FDIC has too many banks to cover and itself becomes insolvent. Congress could appropriate more money to it, but the federal treasury isn't a bottomless pit either. At some point, the treasury becomes insolvent. It could print more money, but that would further reduce the value the dollar and cause inflation to rise faster. No matter what, you're going to get squeezed.

 

My suggestion? Buy a productive farm and quickly learn how to provide for yourself. If you're in an urban area, join with or create an urban farm. Learn how to make and/or repair bicycles. Learn basic mechanics, plumbing, electrical work. Find out how to build a wind turbine. A solar water heater. So many of us lack these basic skills that if the financial rug gets pulled out from under us that we'll have no way to take care of ourselves, let alone our families.

 

Much of this has been discussed for more than a year at the peak oil thread. I believe you are seeing glimpses at what the future holds. This isn't temporary. It is a beginning.

I'm certainly not a stock analyst, but I don't see a rational reason for this drop.  If I had money to invest, it would be on National City stock right now.

 

I completely agree. I wish that I had a few extra grand to invest. Talk about a knee-jerk market. There is no reason for NCB to be tanking. They'll rebound.

 

What evidence is there for us to believe that is the case for NatCity?

 

Haven't you been following this story? From what I'm reading in the papers and from a friend who is high up in National City, NCB currently is fine.  Seems like many investors have a "throw the baby out with the bath water" mentality right now.

 

Yes I have been following this story very closely.  Thanks for asking.

SELL NOW!

 

JUST BOUGHT!!!!

 

Second that!!

I believe you are seeing glimpses at what the future holds. This isn't temporary. It is a beginning.

 

Wow, what optimism!  :roll:

I believe you are seeing glimpses at what the future holds. This isn't temporary. It is a beginning.

 

Wow, what optimism!  :roll:

 

Basic psychology - if you believe it to be true, you start taking action that makes it come true.  Only consumer panic will cause National City to fail.

 

http://money.cnn.com/2008/09/29/news/national.city_deposits.fortune/index.htm

 

But the demise of WaMu and Wachovia shows that in the current panic, a bank's executives aren't completely in control of their fates. At WaMu, depositors withdrew billions of dollars after Lehman Brothers' collapse two weeks ago sent the financial markets into a panic, forcing the Office of Thrift Supervision to seize the thrift and put it into FDIC receivership.

 

In today's trading, National City stock is up 32%

 

http://moneycentral.msn.com/detail/stock_quote?Symbol=NCC

So you kids are all now rich. 

The people down in Charlotte are really scrambling over the news with Wachovia...make sure and take a look at the comments to entry...many apparently fear they're the next Detroit!:

http://marynewsom.blogspot.com/2008/09/how-wachovia-sale-affects-charlotte.html

 

It's seems that Charlotte's lack of economic diversity (e.g. all of its eggs in the banking industry) is really causing people to panic.  This also is likely to affect the new, 48 (?) story Wachovia headquarters being built, as well as a condo high rise and performing arts complex.

 

Personally, I'm guiltily enjoying seeing these people who deserted OUR REGION for seemingly greener pastures now realize that even they are vulnerable to economic challenges.  But I know – whether or not their bottom line is as sound as they've described it – there is the chance that the same fate could await NatCity.  And while we are certainly much better diversified than Charlotte, we all know that the sale of NCC would be a net negative for Cleveland.

In today's trading, National City stock is up 32%

 

http://moneycentral.msn.com/detail/stock_quote?Symbol=NCC

 

my friend owns 20 shares, the stock went up 32% and he made like $5

I share the schadenfreude, but unfortunately Cincy or Cleveland (maybe Cbus) could very easily see at least one of the local banks go poof in all this. They would hurt almost as much, though obviously Ohio remains more diversified.

Analysts are estimating as much as 1/3rd of regional banks will merge, so if it happens, it certainly wouldn't be an Ohio problem. The real problem we're facing is high deficits. Look at the past demise of Korea, Russia, Japan, etc and you will see a problem with running deficits they couldn't get out of. Borrowing money isn't the solution - we have to consolidate, take the brunt, go into recession and emerge stronger, not borrow money to subsidize inefficient unethical behavior.

 

This is why I hope a large bank (and airline) crumbles, so that the market "right sizes" itself.

And again today up another 65.14% to 2.89!

good news for everyone that bought on Monday (morning)

 

http://moneycentral.msn.com/detail/stock_quote?Symbol=NCC 2.89  +1.14 +65.14%

Rich people could make a killing off of NatCity. I wish my stocks were real. I bought NCC when it bottomed out. 72k profit in one day. Money can be made in any market.

 

 

Money can be made in any market.

 

Yes, but it can also be lost in any market just as easily.

Not if you're a beast on UpDown.com like me

And you are also starting out with $1 million in fake money.

True

lol ... David, you're crazy ... what program is that?

It's updown.com. Seicer showed it to me. You can buy/sell stocks. Everything is updated in real time like the stock market, you're just entering it with fake money.

What's your username? We can compare trading!

what are the odds ncb can hold on and not be absorbed by the borg?  :-o  :whip:

 

 

 

NCC down over 30% today.

Damn.

 

I wonder how this will effect The Banks project since they are the main financier behind it?

At the very least, an out-of-towner purchaser would minimize any job loss as well.

 

Damn, this is not good news this morning.

Hopefully, Bank of Nova Scotia purchases NCB.

If anyone knows the answer to my post (#292), please answer, thanks!

 

I'm assuming the new bank will just take over financing, but I was curious as to whether anything else would change?

Funny, my dad (who works for Wachovia Securities, but don't worry, he already has found a different job but just hasn't started yet :)) said that financial reports released on National City state that it can stand on its own and isn't nearly in as bad of shape as the media makes it out to be...  He made it seem like a sale wasn't actually necessary......... so maybe it's just desired?

Funny, my dad (who works for Wachovia Securities, but don't worry, he already has found a different job but just hasn't started yet :)) said that financial reports released on National City state that it can stand on its own and isn't nearly in as bad of shape as the media makes it out to be...  He made it seem like a sale wasn't actually necessary......... so maybe it's just desired?

 

This is correct.  From a capitalization standpoint, National City is fine.  In fact, it has the highest capitalization rate among all tier I banks.  Asuming "business as usual" and nothing needs to be done.

 

The issue is liquidity.  ALL financial companies are less willing to lend right now.  National City has lines of credit with other financial institutions and if they suspend those lines of credit, that's a problem.

 

Also, in the "consumer panic" alert, some small businesses have pulled deposits.  Path dependency = if you fear it to happen, you will take action to make it happen...and this is what they are seeing happening.

 

Basically, any further consumer panic or credit freeze from lenders and National City will be taken over.  The executive board has done everything they can to ensure National City is in the best position it can be to withstand the current market situations.  Unfortunately, their fate lies in the hands of others.

Thanks for further explaining :).

Analysts the last couple of weeks have said that National City is a takeover target because its stock price has slid so dramatically. Last week, it was $1.36.

 

That's why I bought 100 shares this week. I was bargain hunting.

 

Worst-case scenario: If the company folds, I lose only $220.

Medium scenario: If it returns to its average per-share value over the last 20 years, I will see my investment increase in value 10 times.

Best-case scenario: the share price increases 20 times in returning to its 2007 value. I certainly don't expect that though.

 

We'll see how smart/dumb I am.

Also, in the "consumer panic" alert, some small businesses have pulled deposits.  Path dependency = if you fear it to happen, you will take action to make it happen...and this is what they are seeing happening.

 

Wouldn't the following article from the Plain Dealer indicate that this in fact isn't what is hurting them (at least through June 30)?

 

http://www.cleveland.com/plaindealer/stories/index.ssf?/base/business-8/1223541109300460.xml&coll=2

 

Cleveland-based National City finished the year ending June 30 with nearly 32 percent market share in the Cleveland-Elyria-Mentor region, up from 28 percent a year earlier, according to the Federal Deposit Insurance Corp. Deposits jumped to $20.1 billion, from $16.7 billion.

 

Also surprising is that Key's deposits are up (albeit not as much).

Just for sh!ts and giggles:

 

 

Although Im guessing for the people in that building, more sh!ts than giggles! :wink:

 

Slow day at work, MayDay?? ;)

No, I've just wrapped up the last of seven THOUSAND square feet of signage for an upcoming tradeshow and I needed something ANYthing different to work on!!!

It would be nice to see PNC come into the Columbus market. I've been impressed with them over the years.

I want my bank to be bought by Bank of America! 

so how bad would it be if national city got taken over? i think they will be soon

 

im definitely gonna buy some NCC  8-)

Bank of America?  That's the the last thing we need.  Scotiabank please (if anything).